How to Overcome Barriers to Better Energy Management

Historically, businesses have often overlooked energy management, treating it as a fixed overhead rather than a variable cost that could be optimized. However, as energy costs continue to climb and environmental sustainability becomes imperative, the perspective on energy management is undergoing a significant transformation. This shift is increasingly discussed in boardrooms across the globe, emphasizing the need for more strategic energy use.

As the urgency to manage energy more efficiently grows within the corporate world, several persistent challenges hinder effective energy management strategies.

Challenges in Modern Energy Management

Justifying ROI

A pivotal challenge in advancing energy management initiatives is the difficulty in justifying the return on investment. This is compounded by the often insufficient or inaccurate data available to decision-makers, making it hard to present a convincing case for investment in energy projects. Industry analysts like Gartner highlight that ROI justification and conflicting priorities are major hurdles, affecting over 40% of businesses attempting to implement energy efficiency measures.

Green Reputation

Beyond mere cost reduction, there is a growing imperative for companies to bolster their reputational capital through visible green initiatives. A significant driver for better energy management stems from the corporate desire to be perceived as environmentally responsible. Remarkably, a third of the world’s largest public companies have committed to net zero targets, underscoring the strategic importance of sustainability. This shift is not just about compliance but also about attracting eco-conscious clients and talent, with more than two-thirds of business leaders considering environmental accountability a priority. According to recent surveys, nearly 79% of these leaders are either already engaged in renewable energy power purchase agreements or plan to initiate such agreements within the next two years.

Data Complexity

The sheer volume and complexity of data pertaining to energy consumption and efficiency can overwhelm traditional management systems. Many businesses struggle with transforming this vast data into actionable insights that can drive strategic energy decisions. This complexity often results in suboptimal energy usage and inefficiency that could otherwise be mitigated with more sophisticated analytical tools.

Strategic Shifts in Energy Use

In response to rising energy costs and environmental goals, companies are not only focusing on reducing their energy usage but are also strategically shifting their energy consumption to cheaper times of the day. This trend is particularly noticeable among forward-thinking manufacturers who align their production schedules with times when energy prices are lower and renewable energy availability is higher. Such strategic shifts not only reduce costs but also contribute to a lower carbon footprint, aligning operational strategies with broader environmental objectives.

The Business Case for Green Energy Management

The drive towards energy efficiency and reduced carbon emissions is becoming a crucial part of business strategies. Companies are now more than ever required to implement comprehensive energy management practices that not only tackle cost but also enhance their market competitiveness through sustainability. The dual benefit of cost reduction and improved corporate sustainability profile makes a compelling case for businesses to invest in advanced energy management solutions.

A Three-Step Strategy for Effective Energy Management

Navigating the complexities of energy management requires a structured and strategic approach, especially given the persistent challenges of cost and availability. Recent surveys indicate that almost half (46%) of organizations report moderate to significant disruptions due to energy cost and availability issues over the past year. With many companies primarily focusing on short-term energy demand reduction strategies, adopting a more comprehensive and long-term strategy is becoming increasingly important to ensure resilience and sustainability.

Step 1: Reduce Overall Load

The first step in an effective energy management strategy is to minimize overall energy consumption wherever possible. This involves conducting thorough audits to identify wasteful practices and outdated equipment that consume excessive power. By implementing more energy-efficient technologies and optimizing operational practices, businesses can significantly reduce their energy load, which not only cuts costs but also lessens environmental impact.

Step 2: Analyze Load Profiles

Understanding the detailed composition of your energy usage is crucial. Distinguishing between fixed and variable loads helps in pinpointing when and how energy is used throughout the operations. This analysis is critical for managing costs more effectively and for identifying opportunities where energy use can be optimized without compromising business operations.

Step 3: Shift Load to Off-Peak Times

Leveraging off-peak times can lead to substantial savings and operational efficiency. By shifting energy use to times when energy is cheaper and more abundant from renewable sources, businesses can benefit from lower rates and contribute to a more balanced energy grid. This not only reduces costs but also aligns with sustainability goals by maximizing the use of renewable energy sources.

The Importance of a Long-term Perspective

While the immediate benefits of reducing energy costs are clear, the long-term perspective of managing energy more intelligently is equally important. Companies that anticipate future energy trends and adapt accordingly are better positioned to face the challenges of energy cost fluctuations and regulatory changes. This proactive approach not only ensures operational efficiency but also strengthens market competitiveness.

Harnessing Data for Energy Management

The key to successful energy management lies in leveraging data effectively. Enhanced data visibility and reliability can empower businesses to make informed decisions that substantiate energy initiatives. The potential to harness detailed analytics has never been greater, though this also requires sophisticated tools to interpret vast amounts of data into meaningful insights.

How the Energy Industry Can Support Businesses

As businesses endeavor to overcome these internal hurdles, the role of the energy industry becomes crucial. Energy suppliers and technology providers can aid significantly by:

• Providing Accurate Data: Suppliers should ensure that businesses have access to precise and timely energy consumption data to support cost management and sustainability goals.
• Offering Advanced Energy Software: Tools like POWWR’s energy management software play a pivotal role in enabling businesses to model energy scenarios effectively, manage loads, and forecast needs with greater precision.

Implementing Advanced Energy Solutions

POWWR’s software solutions offer advanced functionalities that help suppliers and brokers address the specific needs of businesses aiming to enhance their energy management:

• Automated Custom Pricing: Simplifies the process of creating custom quotes, saving time and enhancing the accuracy of pricing strategies.
• Comprehensive Market Insights: Delivers in-depth analytics on market trends and energy prices, enabling businesses to make proactive adjustments.
• Enhanced Load Management: Uses predictive analytics and machine learning to optimize energy usage and reduce costs during peak times.

Aligning in the Industry with Organizational Priorities

The journey towards effective energy management is complex but essential for modern businesses. By aligning with strategic partners like POWWR, suppliers, and brokers can help businesses navigate the challenges of energy management more effectively, achieving not only cost savings but also progressing toward their sustainability goals.

About POWWR

POWWR helps you sell and manage your energy procurement journey more efficiently by providing advanced platforms and simple solutions for both suppliers and brokers. In fact, we provide the only end-to-end connected journey for energy sales.

Learn more by booking a free demo today.